Figures suggesting insurance fraud has reached a record high reflect a ‘cheaper to pay than investigate’ mentality on the part of insurers, the Association of Personal Injury Lawyers said today.
The body was responding to figures from the Association of British Insurers (ABI) which revealed that the value of fraudulent insurance claims rose to a record £1.3bn in 2013, up 18% on the previous year.
An APIL spokesman said: ‘Insurers have the answer to stopping fraudulent claims at their own fingertips and are responsible for offering compensation before any proof of injury is obtained.
‘The public want a fair system where injured people get adequate compensation and medical evidence is required to prove the injury. The insurers must end their “cheaper to pay than investigate” mentality.’
According to the ABI, insurers detected a total of 118,500 bogus or exaggerated insurance claims, equivalent to 2,279 a week. The average value of fraud detected across all types of insurance products was £10,813.
Fraudulent motor insurance claims were the most expensive and common, with 59,900 claims, up 34% on 2012, amounting to £811m, up 32% on the previous year.
Aidan Kerr, head of fraud at the ABI, said: ‘The message is clear: never has it been harder to get away with committing insurance fraud; never have the penalties - ranging from a custodial sentence and a criminal record to difficulties in obtaining financial products in the future - been so severe.’
Stratos Gatzouris, head of the fraud sector focus team at the Forum of Insurance Lawyers said legislative reform is needed to encourage civil courts to strike out entire third-party claims where one element of the claim is fraudulent.
12 Readers' comments